GBP/EUR Exchange Rate Flat prior to Notable Data Releases
The Pound Euro (GBP/EUR) exchange rate is trapped in a narrow range this morning as both GBP and EUR investors await several highly anticipated data releases.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1686, virtually unchanged from this morning’s opening rate.
Pound (GBP) Subdued before Spring Budget
The Pound (GBP) is holding steady against the majority of its peers as markets await the publication of the UK’s Spring Budget on Wednesday.
Keeping GBP exchange rates afloat this morning prior to the release are the UK’s finalised services PMIs.
Although the data printed at a downwardly revised level, coming in at 53.8 rather than 54.3, confirmation of another growth expansion in February is helping to alleviate fears of a continued recession in the UK.
Looking ahead, all eyes will turn to tomorrow’s Spring Budget.
With the UK Chancellor, Jeremy Hunt, under pressure to deliver a Budget that will kick-start growth in the UK economy, any tax cuts deemed ‘unaffordable’ by markets may in turn see GBP exchange rates plummet.
Euro (EUR) Muted ahead of ECB Interest Rate Decision
The Euro (EUR) is treading water this morning as investors await the European Central Bank’s (ECB) latest interest rate decision on Thursday.
Although no policy changes are expected, markets will turn to the accompanying press release for any forward guidance surrounding upcoming rate cuts.
Should the central bank strike a hawkish tone and push back against expectations for an April rate cut, this may underpin EUR exchange rates.
Prior to Thursday’s interest rate decision, several economic data releases may lend the Euro some support tomorrow.
The Eurozone’s latest retail sales data is expected to report that sales growth rebounded in January, from -1.1% to an expected 0.1% increase.
Similarly, an expected expansion in Germany’s trade surplus last month could lend the common currency some support.
Looking past Thursday’s interest rate decision, the Eurozone’s third GDP estimate for the fourth quarter of 2023 may infuse volatility in the Euro on Friday.
Should the data print below expectations and confirm that the Eurozone’s economy contracted in the fourth quarter as well as the third, this may pave the way for a technical recession in the Eurozone, following two quarters of negative growth.
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